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Health Plans: Debating Medical Necessity

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Autism mandate pits health insurers versus states and advocates.

Displeased with the services that health insurers are covering, state legislatures are increasingly using mandates to expand coverage—but that comes with a price.

Council for Affordable Health Insurance in Washington, a research and advocacy association of insurance carriers, releases an annual report focusing on how health insurance mandates are adding to health costs. The organization this year estimated that there are 2,133 mandates covering specific services and types of providers throughout the country.

Most mandates add less than 1% to health premiums, but others can add up 10% to costs. In some states, the combined mandates add close to 50% to health premium costs, according to CAHI. One area that more states are mandating is autism coverage, which CAHI estimates adds less than 1% to premiums. However, with more children diagnosed with autism, those costs could inch higher.

Many health insurers have historically covered medical and mental health-related services, but autism advocates, such as Autism Speaks, and states are pushing for insurers to also pay for behavioral treatment, such as applied behavioral analysis (ABA), which teaches children social, motor, and verbal behaviors and reasoning skills. Activists say that autism is one of the top 10 most common neurological disorders, but is the only one that some health insurers don't cover.

The Autism Society of America estimates caring for a person with autism can reach $5 million over a lifetime.

Families need help with that cost, and with states facing increasingly tight budgets, legislatures see health insurers as a way to get the children needed services without having to pay the tab, says JP Wieske, director of state affairs for CAHI. He says states have failed to give these children the proper care through the schools so they are passing the responsibility on to insurers.

For health insurers, there is also the question as to whether therapies like ABA should be considered within the scope of health insurance. Paul Keith, MD, medical director of behavioral health at WellPoint, which operates BlueCross plans and is one of the largest health insurers with 34.2 million members, says the company covers any "medically necessary services for children with autism—the same for a child with any other development disorder."

The key phrase for insurers like WellPoint is "medically necessary." Keith says educational services should be provided by schools and WellPoint doesn't reimburse for those services because they are not medical services.

"[ABA] services are provided by someone who doesn't have any type of license and if you don't have a license then you don't provide a medical service. These are educational services," says Keith.

About half of the 50 states now have some type of autism mandate with a dozen featuring what Autism Speaks calls "comprehensive autism insurance reform."

A recent addition to the autism mandate is Colorado, which has a new mandate that goes into effect in July 2010.

One of the health insurers that will be impacted is Rocky Mountain Health Plan, the Grand Junction, CO-based health insurer with more than 170,000 members. Neil Waldron, chief marketing officer and vice president of strategic initiatives, says the new law applies only to group insurance plans and does not require Medicaid or the state Children's Health Insurance Plan to provide those same services.

Waldron says Rocky Mountain has traditionally reimbursed for medical and mental services, but not behavioral training and management, which they will have to pay for now.

Waldron says autism mandates are an example of the tradeoff between giving coverage to specific people who need it versus raising the cost of insurance in general. He adds these kinds of mandates are raising costs for small employers who are struggling to provide health coverage to their employees.

"Autism coverage is basically a very good example of the dilemma we have in healthcare in general, which is that many Americans can't get the care they need and as a society we can't afford the care we get. It's a real serious dilemma from a national point of view and this is just one aspect of it," says Waldron.

Les Masterson

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